Energy Policy

18th March 2017

Official government projections could reveal an exciting shift in the UK’s plans to decarbonise its power grid. Is the government quietly preparing for a surge of renewable energy development from the mid-2020s onwards as the cost of clean technologies continue to fall and decarbonisation of the economy gathers pace? That is the question prompted by energy and emissions projections released by the Department for Business, Energy, and Industrial Strategy (BEIS) earlier this week, which suggest officials have significantly upgraded their expectations for renewable energy deployment beyond 2020. The renewables industry had been hoping the government would announce how it intends to support clean energy development beyond 2020 in last week’s budget, but the Treasury simply confirmed it would replace the current Levy Control Framework clean energy spending cap with a new set of controls, while declining to provide further details. This week’s updated energy and emissions projections for 2016 could provide an insight into the government’s thinking, confirming that its ‘reference scenario’ has been changed in the past 12 months to include significantly higher levels of renewables capacity and lower than previously expected levels of unabated gas power and carbon capture and storage (CCS) capacity. The report stresses that “beyond 2020, the scenario presented here is illustrative and includes assumptions that may go beyond current government policy”. It also notes that “there is significant uncertainty over how the tools available for system management would adapt to changes in generation mix, and these outputs should be viewed as illustrative”. However, annexes to the report reveal the projection for cumulative new build renewables capacity from 2016 to 2035 now stands at 45GW, marking a sharp increase in the 2015 projection for 33GW of new capacity. Short to medium-term projections are more mixed, with the report suggesting new build renewables capacity in 2021 will be 16GW, representing a small decline on the 18GW projected a year ago, presumably due to the current delay in confirming price support levels beyond 2020. However, from 2024 onwards – the year BEIS predicts the UK will generate no coal power for the first time since the industrial revolution – predictions for renewable power capacity have been upgraded, with 34GW of new build expected by 2029, representing a sharp increase on the 25GW previously expected. In contrast, the government is predicting significantly less power will come from new build gas and CCS projects than previously expected. The reference case predicts new build natural gas plants will deliver just 15GW of capacity in 2035 with gas as a whole providing just 35TWh of power, compared to 176TWh from renewables and 135TWh from nuclear. In contrast, 2015’s projections put cumulative gas new build at 27GW.

Clients have included Greenpeace, Nuclear Free Local Authorities, WWF Scotland and the UK Government’s Committee on Radioactive Waste Management.

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